Correlation Between Hollywood Bowl and COMPUGROUP MEDSPADR

Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and COMPUGROUP MEDSPADR at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hollywood Bowl and COMPUGROUP MEDSPADR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hollywood Bowl Group and COMPUGROUP MEDSPADR 1, you can compare the effects of market volatilities on Hollywood Bowl and COMPUGROUP MEDSPADR and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hollywood Bowl with a short position of COMPUGROUP MEDSPADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and COMPUGROUP MEDSPADR.

Diversification Opportunities for Hollywood Bowl and COMPUGROUP MEDSPADR

-0.45

Correlation Coefficient

Hollywood Bowl  COMPUGROUP MEDSPADR

Very good diversification

The 3 months correlation between Hollywood and COMPUGROUP is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and COMPUGROUP MEDSPADR 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMPUGROUP MEDSPADR and Hollywood Bowl is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hollywood Bowl Group are associated (or correlated) with COMPUGROUP MEDSPADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMPUGROUP MEDSPADR has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and COMPUGROUP MEDSPADR go up and down completely randomly.

Pair Corralation between Hollywood Bowl and COMPUGROUP MEDSPADR

Assuming the 90 days horizon Hollywood Bowl Group is expected to under-perform the COMPUGROUP MEDSPADR. But the stock apears to be less risky and, when comparing its historical volatility, Hollywood Bowl Group is 3.33 times less risky than COMPUGROUP MEDSPADR. The stock trades about -0.15 of its potential returns per unit of risk. The COMPUGROUP MEDSPADR 1 is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,310  in COMPUGROUP MEDSPADR 1 on October 24, 2024 and sell it today you would earn a total of  810.00  from holding COMPUGROUP MEDSPADR 1 or generate 61.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Hollywood Bowl Group  vs.  COMPUGROUP MEDSPADR 1

Hollywood Bowl Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hollywood Bowl Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

COMPUGROUP MEDSPADR

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in COMPUGROUP MEDSPADR 1 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, COMPUGROUP MEDSPADR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hollywood Bowl and COMPUGROUP MEDSPADR

The main advantage of trading using opposite Hollywood Bowl and COMPUGROUP MEDSPADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, COMPUGROUP MEDSPADR can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in COMPUGROUP MEDSPADR will offset losses from the drop in COMPUGROUP MEDSPADR's long position.

The idea behind Hollywood Bowl Group and COMPUGROUP MEDSPADR 1 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.